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Construction Loans in Clovis
Clovis continues to attract families and retirees seeking new construction opportunities in Fresno County. Custom home builds and major renovations allow buyers to create properties tailored to their exact specifications.
Construction loans provide the financing needed to build from the ground up or complete substantial remodels. These specialized loans release funds in stages as your project progresses, ensuring money flows when contractors need it.
Whether you're building your first home or renovating an existing property, construction financing works differently from traditional mortgages. Understanding the process helps you plan timelines and budgets effectively.
Lenders typically require 20-25% down payment for construction loans, higher than conventional mortgages. Your credit score should be 680 or above, with some lenders preferring 700+.
You'll need detailed construction plans, a licensed contractor, and a realistic timeline. Lenders review the builder's credentials, project budget, and your ability to make interest-only payments during construction.
Income verification follows standard mortgage guidelines. However, lenders scrutinize your reserves more carefully since construction projects can face unexpected costs. Most require 6-12 months of payment reserves.
Not all lenders offer construction loans, making the search more challenging than for conventional financing. Local banks and credit unions in Fresno County often have more experience with Clovis-area projects than national lenders.
Construction-to-permanent loans simplify the process by converting to a standard mortgage when building completes. This option means one application, one closing, and potentially better rates than separate construction and permanent loans.
Expect higher interest rates during construction, typically 1-2% above conventional mortgage rates. Rates vary by borrower profile and market conditions. The permanent loan rate locks in separately, usually near project completion.
Working with a mortgage broker who understands construction financing saves substantial time and frustration. We connect you with lenders experienced in Clovis projects and familiar with local contractors and building requirements.
The draw schedule determines when funds release during construction. Understanding this schedule prevents project delays. Your broker can explain how inspections, lien waivers, and fund disbursements work together.
Many borrowers underestimate the importance of contingency funds. We recommend budgeting an additional 10-15% beyond your contractor's estimate for unexpected expenses. This cushion keeps projects on track when surprises arise.
Bridge loans serve different purposes than construction loans, despite both being short-term financing. Bridge loans help purchase new homes before selling current ones, while construction loans fund building projects.
Some borrowers consider hard money loans for construction, especially for fix-and-flip projects. Hard money closes faster but carries significantly higher rates and shorter terms than traditional construction financing.
Once construction completes, your loan typically converts to a conventional or jumbo mortgage. The conversion happens automatically with construction-to-permanent loans, or requires refinancing with standalone construction loans.
Clovis building permits and inspections follow Fresno County regulations. Your lender requires permits before releasing initial funds. Factor permit processing time into your construction timeline to avoid delays.
The city's growing population creates demand for custom homes and renovations. Understanding local building codes, HOA requirements, and zoning restrictions prevents costly mid-project changes.
Seasonal weather in Central California affects construction timelines. Summer heat can slow certain work, while winter rains may cause delays. Build weather contingencies into your schedule and budget.
Approval typically takes 30-45 days, longer than conventional mortgages. Lenders need time to review construction plans, contractor credentials, and project budgets thoroughly before commitment.
Some lenders allow owner-builders, but most require licensed general contractors. Owner-builder loans demand more documentation and typically require additional construction experience from the borrower.
You must cover overages out of pocket. Lenders won't increase loan amounts mid-project. This is why substantial contingency reserves are critical for construction financing success.
You make interest-only payments on funds already drawn during construction. As more money releases, your interest payment increases. This minimizes payments while building progresses.
Lenders require inspections at each construction phase before releasing funds. Inspectors verify work completion matches draw requests, ensuring quality standards and protecting both borrower and lender interests.
Mortgage financing for independent contractors and freelancers who earn 1099 income instead of traditional W-2 wages.
Mortgage programs that allow borrowers to qualify based on liquid assets rather than traditional employment income.
Non-QM loans that use 12 to 24 months of bank statements to verify income for self-employed borrowers.
Short-term financing that bridges the gap between buying a new property and selling an existing one.
Debt Service Coverage Ratio loans that qualify investors based on a rental property's income rather than personal income.
Mortgage programs designed for non-US citizens and non-permanent residents who want to purchase property in the United States.
Asset-based short-term loans primarily used by real estate investors for property acquisition and renovation projects.
Mortgages that allow borrowers to pay only the interest for an initial period, resulting in lower monthly payments upfront.
Financing solutions tailored for real estate investors purchasing rental properties, fix-and-flip projects, or investment portfolios.
Home loans for borrowers who have an Individual Taxpayer Identification Number instead of a Social Security number.
Adjustable rate mortgages held in a lender's portfolio rather than sold on the secondary market, offering more flexible terms.
Non-QM mortgages that use a CPA-prepared profit and loss statement to verify income for self-employed borrowers.
Home loans with interest rates that adjust periodically based on market conditions after an initial fixed-rate period.
Specialized mortgage programs designed to support homeownership in underserved communities with flexible qualification criteria.
Mortgages that meet the guidelines and loan limits set by Fannie Mae and Freddie Mac for secondary market purchase.
Traditional mortgage financing not backed by a government agency, offering flexible terms and competitive rates for qualified borrowers.
Innovative loan products that leverage projected home equity growth to provide favorable financing terms.
Government-insured mortgages from the Federal Housing Administration with low down payments and flexible credit requirements.
A revolving line of credit secured by your home equity that allows you to borrow funds as needed during a draw period.
A fixed-rate second mortgage that provides a lump sum of cash by borrowing against the equity built in your home.
Mortgages that exceed the conforming loan limits set by the FHFA, designed for financing high-value luxury properties.
Loans for homeowners aged 62 and older that convert home equity into cash without requiring monthly mortgage payments.
Government-backed zero down payment mortgages for eligible rural and suburban homebuyers who meet income limits.
Government-guaranteed mortgages for eligible veterans, active-duty service members, and surviving spouses with zero down payment.